Published 4:00 am, Tuesday, December 30, 1997

It's two years before the millennium -- and it's already too late for many large companies to trounce the computer glitch that threatens to crash their systems on Jan. 1, 2000.

The problem stems from a shortcut that many programmers took in the 1960s and '70s: Instead of writing out the year, say "1997," in software code, they wrote "97."

That shortsighted approach saved computer memory but assumed every year began with "19." Now, unless somebody changes all the millions of lines of computer code in the world, many systems will think that the year 2000 is the year 1900.

Left unchecked, the date confusion could foul up banking, insurance and transportation-scheduling systems, among others. Doomsayers predict that it even could cause a global depression, although others say it's more likely to cause only a few bills to be garbled.

The cost of fixing all the software in the world is estimated to be between $300 billion and $600 billion. For example, Bank of America and the state of California will spend about $200 million each on the problem.

President Trump addresses nation after mass shooting at Florida SchoolWhite House

"The computer has been a blessing; if we don't act quickly, however, it could become the curse of the age," stated Senator Daniel Patrick Moynihan, a New York Democrat, in a letter urging President Clinton to address the problem. Experts estimate that about one-third of U.S. companies and half of federal government agencies will have failed to erase all the glitches by New Years Day, 2000.

The number of foreign governments and companies that will miss the deadline is even higher.

The glitch is hard to fix because the software code is so voluminous. Some firms have to comb through as many as 120 million lines of code to find the dates that need fixing.

"It's like replacing light bulbs in Las Vegas: Each bulb fix may be trivial, but you wouldn't want to replace them all in an afternoon," said Bob Austrian, analyst at Montgomery Securities in San Francisco.

Companies frantically are hiring programmers to sift through millions of lines of software code looking for each date. Analysts say big corporations are paying about $1 per line of code.

Some firms ship out the work to outside consultants and even to contract workers in India and other countries. Other companies, such as Bank of America and Charles Schwab, simply are reassigning their current employees to tackle the job.

Either way, experts predict a labor shortage as the pressure to meet the deadline increases.

The Social Security Administration began working on the problem in 1989 and hopes to be finished tweaking its code by Dec. 31, 1998. That will leave the agency with one year to test the new system.

Social Security officials originally estimated that the project would require 300 work years -- the equivalent of 300 people each working one year. Now, they believe it will take up to 500 work years to search through 30 million lines of software instructions.

And even though Social Security got a head start, its efforts could be stymied by any failures at the Treasury Department, which prints and mails Social Security checks.

A House subcommittee said it expects that Treasury, if it continues at its current pace, won't finish its Year 2000 work until 2004.

"Unless agencies make faster progress soon, the federal government runs a serious risk of a massive electronic breakdown on January 1, 2000," said Representative Stephen Horn, a California Republican who ordered the report on Year 2000 compliance in the federal government.

However, a more likely scenario is that companies and governments will fix their most important systems by the deadline -- and let the less crucial operations wait until after the turn of the century.

For example, Governor Pete Wilson has ordered California state agencies to fix "mission critical" functions, such as the ones that issue driver's licenses, pay welfare recipients, track parole dates and assess fees and taxes, by December 1998.

An additional 1,000 state computer systems, which are not "mission critical," such as ones that do document tracking within a department, will be fixed later.

Just the partial fix is estimated to cost the state at least $187 million -- and much of the money will come out of existing budgets.

"People are saying, 'I can't have these new desktop computers because I have to be sure my mission critical applications work,' " said Ron Ridderbusch, chief deputy director of the state Department of Information Technology.

But doomsayers predict that the fallout will be much worse than a few people not getting new PCs. They predict that computers could fail at such crucial places as nuclear reactors, hospitals, the Federal Aviation Administration and banks.

They say those computer meltdowns could lead to power failures, crashed planes and a run on the banks -- leading to worldwide economic problems.

"There is a 40 percent risk of a worldwide recession that . . . could be as severe as the 1973-'74 global recession," Edward Yardeni, chief economist at Deutsche Morgan Grenfell bank, told a congressional committee last month.

Even if it's not that bad, the computer glitch probably will give Luddites the last laugh.

"There is going to be a bit of a backlash," said Year 2000 consultant Peter De Jager. "We and our computers were supposed to make life easier; this was our promise. What we have delivered is a catastrophe."